Compaq Message Board - Msg: 13326484

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Technology Stocks : Compaq

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To: JDN who wrote (80546)	3/31/2000 5:37:00 PM
From: Loki	Read Replies (2) of 97611

JDN...RE: "favored CPQ over DELL. Now thats one for the books, but probably its a valuation issue." I've heard several persons consider CPQ a "valuation issue"....or value stock. DELL's P/E ratio is 86...while CPQ's PE is 83. (TTM) One could argue that CPQ's future earnings are expected to be better (than TTM) and that WS will invest looking forward. IMO, a value play is a beaten down stock where the company gives an indication (guidance?) that there will be a turnaround, improving the circumstances from those that depressed the stock. (A company must have the trust/credibility of WS so that guidance is believed and acted upon.) IMO neither the TTM P/E ratio nor any guidance given by CPQ make the stock a value play, at this moment. What are your thoughts? Loki PS. Actually, one could argue that stockholders are extremely fortunate to have the CPQ price in the mid 20's considering the aggregate profit of the last three years.

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